US sees supply, demand mismatch as EV adoption lags
Despite electric vehicle (EV) production on the rise and new EV model announcements continuously in the news, still only 5% of fleets in the United States have nearly or fully transitioned to EVs.
Even though consumers and fleet managers are showing more interest in these vehicles, many are still wary about making the transition and it is mainly due to initial costs related to the transition as well as charging concerns.
Tesla built 1.3 billion EVs in 2022, the most by a U.S. company and second most in the world. Photo: Tesla Gigafactory Nevada (courtesy of Tesla)
The nationwide supply of EVs in stock has swelled nearly 350% in 2023, to more than 92,000 units. That's a 92-day supply, or to say approximately three months’ worth of EVs and nearly twice the industry average, according to the mid-year industry review of Cox Automotive.
Automakers are making big bets on electrification. They've built the cars, and now they're waiting for buyers to come, says Cox Automotive senior manager of economic and industry insights Jonathan Gregory.
However, according to an independent survey with 200 respondents from the fleet industry carried out in May 2023 by news portal Expert Market, while 1 in 20 respondents have taken on the EV transition, 95% of them had either not taken any action at all or had only taken limited action.
While 33% of surveyed fleet managers stated upfront cost was the biggest barrier to changing their fleet (including retiring current vehicles, purchasing EVs and in-direct costs such as retraining drivers and other staff), 74% stated that the federal government should provide greater financial support to facilitate the transition.
Currently, electrified vehicles (BEV, PHEV, FCEV) built in the USA or countries under free trade agreement such as Mexico and Canada are eligible for a tax credit of up to $7,500. Fleet vehicles, however, can also be manufactured in the European Union.
Despite most fleet operators not making the full transition towards electrification just yet, they do have things to look forward to.
To alleviate charging concerns, more charging infrastructure is being deployed throughout the country, not to mention the North America Charging Standard (NACS) slowly taking shape. Moreover, local studies are pointing toward EVs reaching a price parity with gasoline vehicles very soon (est. 2025).
For more on what is taking place throughout North America, download your free copy of the latest Global Fleet eBook on the region entitled Fleet Optimization Acrosss North America.
Top Photo: Shutterstock 1033278703